The US dollar neared its lowest level in nearly seven months as the yen strengthened, with traders focused on upcoming US Treasury buyback announcements and inflation data. The Bloomberg Dollar Spot Index fell as much as 0.2%, approaching its weakest point since February 18. The yen gained 0.5%, extending its monthly rise to about 4%.

Market participants are watching for clues on Federal Reserve policy as economic indicators loom. The dollar’s decline reflects shifting expectations around US interest rates and global capital flows.

The yen’s rally has been driven by speculation over potential policy shifts in Japan and broader risk sentiment. Traders are positioning for volatility ahead of key data releases this week.